Intel (INTC) has been hedging against its bets on Microsoft's (MSFT) Windows 8 by putting its weight behind Google's (GOOG) Android operating system. While I believe it is far too early to call Windows 8 a flop (and please, don't cite Windows RT sales - that ain't real Windows and everybody knows it), it certainly doesn't help Intel's long-term case to be married solely to Microsoft's Windows. Android is the sexy and popular smartphone and tablet operating system, and not being a major player in this space would be corporate suicide. Intel, of course, has put its full might behind this platform in a number of very interesting ways that are worth talking about.
Android Runs On Bay Trail
The Atom Z2760 "Clover Trail" system-on-chip, Intel's first real low power tablet offering, was a Windows 8-only affair. This part was a dual "Saltwell" (32nm Atom core) with a very outdated Imagination Technologies SGX 545 GPU. I believe that the weak GPU was included primarily for time-to-market purposes, as older editions of Intel's "Atom" for Windows used this GPU, and as such the software/driver infrastructure was already there, allowing Intel to focus on getting a chip out in time for the Windows 8 launch. The CPU part of this chip is extremely competitive, but the GPU left much to be desired.
However, as Intel's mobile SoC efforts have really been for Android over the last year, and since "Clover Trail+" came a few months after "Clover Trail", it was easy for Intel to beef up the GPU on this Android focused part to a newer, more powerful GPU from Imagination (and packed twice as many of them, to boot). The latest "Clover Trail+" Atoms are aimed at the Android platform (particularly high end smartphones) first and foremost.
However, Intel plans to unify both the Android and Windows 8 SoC platforms with "Bay Trail". This is Intel's new 22nm SoC with a new processor core, and will utilize Intel's in-house HD graphics. At CES, "Bay Trail" was shown fully functional on both Windows 8 and Android devices.
Intel clearly has no intention of leaving the Android tablet market unserviced, especially as it is not clear if Microsoft's tablet strategy is going to work (Windows RT needs to not exist, otherwise customers will think all Windows 8 tablets are crippled and pointless).
So, great, Intel will have a great chip that can run Android and Windows 8 - what does this mean?
Can You Say, "True Hybrid"?
Intel very recently released a patch for Android 4.2.2 (the latest version) that allows for dual booting of Windows 8 and Android - on the same device! The potential here for a true hybrid - Windows 8 or Android whenever you need one or the other - is actually quite exciting and is a competitive advantage that none of the ARM (ARMH) vendors have. Sure, there is Windows RT (for ARM), but it does not support legacy applications and is therefore unsuitable to take the role of a Windows 8 productivity device.
So, imagine this - ASUS, Acer, Lenovo, Samsung, and others can now release tablets based on Intel's upcoming "Bay Trail" (brand new, 4 core, 22nm Atom) silicon that make perfectly good, super thin Android tablets for when the user wants to use it as a tablet, but then when the user wants a full Windows 8 productivity machine, he/she need simply to attach a keyboard (like the ASUS Transformer) and get to using it exactly as a Windows 8 laptop.
The value proposition here is absolutely huge, and I hope that the OEMs and ODMs come out with sensible, high quality designs that actually sell. If they can really take advantage of this then Intel and the non-Apple (AAPL) tablet/PC vendors could gain a real upper hand in 2H 2013, when "Bay Trail" and "Haswell" will be readily available in the market. Intel shareholders should be very, very excited.
Additional disclosure: I am short ARMH